On November 10, Reuters reported that Huawei plans to sell its smartphone business, Glory, to a minority shareholder camp consisting of Digital China, three state-owned institutions, and TCL for 100 billion yuan ($15.2 billion), covering almost all of Glory’s business assets, including branding, research and development capabilities, and supply chain management, according to people with knowledge of the matter. Glory management and others will hold shares in the new company, the news will be officially announced later this month.
According to news reports, the Shenzhen Star Alliance Information Technology Partnership, which is made up of a number of channel providers, will be one of the parties to take over the glory, an industry chain source confirmed the news.
Star Alliance a total of seven shareholders, in addition to Shenzhen Kunpeng Zhangyi Equity Investment Management Company Limited, the rest of the investors are well-known domestic mobile phone agents, but also Huawei and glory of the mobile phone distributors.
The above rumors, the alphabet list (ID: wujicaijing) to Huawei China Media Affairs Department for confirmation, the other side replied: for rumors and speculation, no comment. This morning Digital China also officially dispel rumors, said Huawei did not reach any agreement on the sale of glory.
36 Krypton reported that 100 billion yuan of the transaction price, is based on the glory of last year’s 6 billion yuan profit, 16 times PE to set. In this regard, the first mobile phone industry research institute president Sun Yanbiao told the alphabet list, for the acquisition of parties, they value the glory of the international gene and e-commerce genes.
He said that during the epidemic, mobile phone transactions in the e-commerce channel accounted for about 35% from the previous rose to a maximum of 60%, even with the improvement of the epidemic declined, but is not expected to reach a low of 35%.
In fact, “glory sale” the news from the spread so far has been more than a month, now close to the ground, more details have also been exposed.
Citing interface news reports, after the glory of independent financing, Huawei will have a number of top executives to join the glory as core executives. The company’s main business is to provide a wide range of products and services to its customers.
After the sale of glory, Ren Zhengfei breakout to where?
Zhao Ming (1906-1970), one of the pioneers of Chinese astronomy
Zhao Ming has told the alphabet list (ID: wujicajing) revealed that on May 15 last year, the U.S. Department of Commerce on national security grounds, Huawei and its 70 subsidiaries on the export control “entity list”, there were already customers worried about the glory of future service continuity will be affected. It’s since then that the countdown has begun to the eventual sale of Pride.
However, from Huawei’s point of view, under the pressure of the United States, the glory of the split sale, is currently the optimal option.
The wind securities analyst Ming-Chi Guo previously analyzed, if Huawei split or sell glory mobile phone, glory mobile phone procurement parts are not subject to the U.S. Huawei ban, will help glory mobile phone business and supplier growth, this glory brand, suppliers and the mainland electronics industry is a win-win situation.
In addition, media reports say that in this deal, glory put forward a three-year listing goal. Ren Zhengfei has repeatedly stated that Huawei is resolutely not listed; but the listing also has the benefit of listing, such as strict regulation, the company’s operations are relatively transparent, Huawei if listed, at least will reduce the outside world, but also for future changes in the possible accumulation of experience.
For Huawei, the sale of glory in addition to saving chips focused on the supply of high-end flagship products, but also means a considerable amount of income, the money can be used to increase Huawei’s investment in other business level, to promote the development of business diversification.
There has been a lot of good news on the market recently: AMD, Intel, TSMC, Sony, Howie Technology, Samsung has now obtained a license to supply Huawei. The attitude of the United States is that more and more chip companies will be allowed to supply Huawei as long as the chip maker does not use the chip for Huawei’s 5G business.
However, this is only to tear open a mouth of the heavy siege, the supply of core high-end chips, Huawei is still struggling – TSMC, for example, according to foreign media reports, TSMC was licensed to 28nm and other mature processes, does not include 16nm, 10nm, 7nm, 5nm such advanced process technology.
Huawei is still looking for a way to save itself. According to the Financial Times, Huawei is planning to build a chip factory in Shanghai that will not use U.S. technology, and it will be operated by Huawei’s partner, the Shanghai Integrated Circuit Research and Development Center. But initially only trial production of 45nm process, equivalent to the A4 chip used in the iPhone 4 in 2010.
But this self-help for chip manufacturing is destined to be long and tortuous, in order to secure the transition, Huawei needs to use other businesses in a timely manner. The Huawei cloud, AIoT, smart car solutions, may be the direction of Ren Zhengfei’s breakout.
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In 2011, Ren Zhengfei set the goal of Huawei to overtake Cisco in the cloud platform and catch up with Google in the cloud business. Now 10 years later, Huawei’s competitors in the “cloud” track have changed from Cisco to domestic and international Internet technology giants such as Amazon and Alibaba.
International research institution Gartner data show that in 2019, the global cloud computing market, Amazon with a 45% share of the dust, followed by Microsoft, Aliyun and Amazon, respectively, occupy 17.9%, 9.1%, and 5.3% of the market share, the pattern has been clear.
Looking at domestic, IDC’s 2019 “China Public Cloud Services Market Semi-Annual Tracking Report” shows that in the second half of 2019, Ali, Tencent, China Telecom, Huawei, and AWS ranked among the top five in the IaaS+PaaS and IaaS market, occupying an overall 76.3% market share in the IaaS+PaaS market.
In the IaaS+PaaS segment, Alibaba topped the list with 41.9 percent market share, followed by Tencent Cloud’s 12 percent, China Telecom’s 7.7 percent, Huawei Cloud’s 7.6 percent and AWS’s 7.1 percent, respectively.
In the first quarter of this year, however, Huawei Cloud’s market share in China has increased to 14.1 percent. But Matthew Ball, principal analyst at Canalys, said the statistic is inclusive of total enterprise, consumer and government spending on cloud infrastructure, and Huawei Cloud’s significant growth is largely contributed by its consumer BG smartphone business.
In the past, the development of Huawei cloud has been tepid, under the two trees of Huawei’s core carrier business and cash cow consumer business, private cloud has become Huawei’s advantageous business, in the summer of 2018 Zheng Ye to accept an interview with AI Finance News Agency, said, “Huawei private cloud itself has a certain degree of competitiveness, signing orders quickly, casually do is a few hundred million dollars. “
After the sale of glory, Ren Zhengfei breakout to where?
However, as far as the development trend of cloud computing market is concerned, public cloud or “public-private partnership” hybrid cloud is the competitive theme of cloud computing in the future. At $68.9 billion and $64.5 billion, the public cloud market exceeded the private cloud for the first time in size. The public cloud market has also grown significantly faster than the private cloud in recent years, with the public cloud market growing at 57% in 2019, compared to the private cloud, which has only maintained a growth rate of around 20%.
Huawei set up CLoud BU in 2017, initially under the Products and Solutions Division, with Zheng Ye, president of the IT product line, as president, but five months later, CLoud BU was upgraded from a second-tier organization to a first-tier organization, according to Finance and Economics, which reported that after this upgrade, CLoud BU will not only account for revenue separately, but will also have its own HR department, CTO office, as well as a strategy and business development department and financial and economic management department.
Behind this round of restructuring, Huawei’s attitude towards the public and private cloud business is shifting significantly – Cloud BU is independent of the three major business groups – carrier, consumer and enterprise – while the private cloud business remains within the enterprise business group.
In January Huawei set up Cloud&AI BG, becoming the fourth largest business group within Huawei, from which Cloud BU is part of, as part of the restructuring, the past cloud computing, servers, storage and machine vision sales teams have been integrated into a unified customer-facing.
In response, Zheng Yelai said that the realignment will solve the problem of inconsistent online and offline architectures, allowing both private and public clouds to use the public cloud architecture and investments.
This also seems to solve the issue of public and private cloud disputes within Huawei.In 2018, a hot post titled “#HuaweiCloud #Listen to your heart, no questions asked” sparked a debate in Huawei’s internal voice community. The poster questioned the two businesses being cut apart and caught in a left-right situation: “It’s always been silent, Cloud BU and IT private cloud are obviously twin brothers, but they can’t form a synergy on the sales and marketing side, and they even hinder each other.”
Under the U.S. chip sanctions, Huawei has significantly accelerated the strategic deployment of Huawei Cloud. In May, Huawei Cloud released a new government and enterprise strategy, saying it would push Huawei Cloud Stack-based hybrid cloud solutions to governments and traditional enterprises, and Zheng Yelai said Huawei has integrated its private cloud team, which was originally placed in the IT product line, with Cloud BU’s team to form a new hybrid cloud product division.
From private cloud to add public cloud, and then to hybrid cloud, Huawei cloud of this transformation, in fact, is the current mainstream cloud services companies have gone, only in 2017 when Huawei established Cloud BU, the other players in the market has already been immersed in the public cloud market for many years, and has begun to work on hybrid cloud.
Amazon launched a hybrid cloud offering, Azure Stack, in 2015 and landed in China in 2017; Amazon launched hybrid cloud services such as AWS Outposts in 2018. In China, Aliyun also launched its proprietary cloud Apsara Stack (proprietary public cloud) back in 2016; Tencent also launched its Blackstone hybrid cloud platform in 2018 in partnership with US software company VMware.
But the competitive focus of cloud computing at the moment is shifting from enterprise cloud to the government and enterprise sector. The government and enterprise sector is exactly where Huawei Cloud previously had a major advantage. Huawei China Cloud and Computing CTO Xiao Coi previously told Caixin that the advantage of Huawei Cloud is that over the past decade, by serving government and enterprise customers, Huawei understands the technical requirements of local deployment and compliance requirements, and has also worked with many enterprises to create tools that match their processes.
After the sale of glory, Ren Zhengfei breakout to where?
Ren Zhengfei (1955-), PRC tech executive and politician, President of PRC from 2008
In an internal speech in March this year, Ren Zhengfei made it clear: “Enterprise requirements for security are more important than private requirements for security, and enterprises require high reliability. This is our strong point, and BAT’s weak point. We’re going to stick to targeting medium and large enterprises and government organizations, and that’s where we’re going to kill it differently than BAT.”
It is worth noting that in early 2017 Huawei made a statement that Huawei Public Cloud was going to surpass Aliyun within three years to be the number one in the cloud computing market in China, but there is still a considerable gap between the two sides.
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When Huawei’s mobile phone business was growing at a rapid pace around 2016, according to Deep Web, top executives in the consumer business were already pondering this question.
If handsets don’t grow, where does the consumer business go from here?
At that time, the IoT was becoming a trend, but no one knows where the future direction, smartphones are releasing the potential energy, once thought to replace most of the PC, TV and other devices. However, Huawei Consumer BG software division president Wang Chengluo and the team that it is difficult for mobile phones to completely replace other devices.In 2015, Wang Chengluo was invited by Yu Chengdong, from Huawei Central Research Institute to Huawei Consumer Business Division.
“If they can’t be replaced, then why not let them synergize with each other?” Wang Chengluo pointed out in an interview with Deepnet in September this year, this consensus is the source point of the birth of the Hong Meng, from the beginning of the design, the goal of the Hong Meng is to connect multiple devices, integrated into one.
Returning to Huawei’s current situation, it is a fact that the mobile phone business has been hit hard, and this issue, which was raised four years ago, is once again nakedly placed in front of Huawei.
The alphabet list previously mentioned in the “Huawei this rope on the grasshopper” article, since July this year, Huawei has consciously increased the assessment of smart watches, headphones and other mobile phone integration products, in the mobile phone business outside the side breakout.
After the sale of glory, Ren Zhengfei breakout to where?
In fact, Huawei has made good progress in terms of shipments of converged products. According to IDC, global shipments of wearable devices reached 72.6 million units in the first quarter of this year, up 29.7 percent year-on-year, with Huawei taking a major share of the market with a growth rate of 62.6 percent. In the tablet market, Huawei shipped 4.9 million units at a growth rate of 32.9% in the third quarter, ranking fourth in the global market and occupying a 10.2% market share.
This provides the hardware foundation for Huawei’s “1+8+N” all-scene strategy, which was proposed in 2018 with “1” representing mobile phones and “8” referring to tablets, PCs, PCs and tablets. TV, the four big screen devices, as well as speakers, headphones, glasses and watches and other small screen and screenless devices, “N” refers to the pan-IoT devices.
Huawei consumer business IoT product line president Zhi Hao previously said publicly, in the past, we focus on “1 + 8 + N” is more of its content meaning, but the whole scene strategy to really work, the middle of the plus sign is critical. “Plus on behalf of Huawei’s connection technology, which is the genes of Huawei’s survival. Huawei has done the underlying connectivity technology first, and the standard is unified, so that we can achieve a true Internet of Everything.”
In Huawei’s IoT ecology, Huawei HiAI is the core driver, Ability Gallery as well as HUAWEI HiLink are the two major ecological platforms for services and hardware, and “1+8+N” is the three layers of structured products of self-research + ecological products.
At the developer conference on September 10, Huawei officially launched the Hong Meng 2.0 system, which focuses on three major upgrades compared to 1.0: distributed soft bus, distributed data management and distributed security, corresponding to the simplification of transmission protocols and multi-device connection processes, and the improvement of the security of the data management system. Multi-device data synchronization and privacy protection capabilities, strengthening the device trusted authentication mechanism, through the modular structure of each system set to achieve the separation of functions.
It is worth noting that distributed design is the biggest difference between Hong Meng and the existing software ecosystem. Wang Chenglu previously mentioned in an interview with Pinnacle, “Based on distributed technology, we break through the limitations of a single phone, and after multiple devices are connected into an ecology, the device will have a new definition, and the ecological development and application forms built on top of this will become different.”
After the sale of glory, Ren Zhengfei breakout to where?
Being able to break through the limitation of a single phone is no less than a blessing for Huawei at the moment, and in fact, it makes Huawei’s entire IoT ecology more flexible but solid.
According to Huawei’s official introduction, HUAWEI HiLink has now activated 50 million ecological users, with a total installed base of 400 million smart life apps and an average of 1 billion daily interaction requests for full-scene devices. In addition, the open source Honmon OS and open HMS Core, also to some extent simplifies the process of developer intervention Huawei HiLink, Huawei’s IoT ecology is also a big help.
However, in terms of volume alone, Huawei’s IoT ecological layout must currently face the challenge from Xiaomi. What’s more, there are very few Huawei direct terminals equipped with the Hong Meng system, and it is still unknown whether the specific interaction experience can be played. At least for now, the phone is still the core entrance of interoperability between hardware – Huawei phone, tablet, and PC, for example, phone + tablet, phone + PC synergy is strong, but does not support three-party collaboration, tablet and PC interaction is also difficult to achieve.
From the experience alone, there seems to be no big difference between this and Xiaomi’s AIoT ecology. It’s just that Huawei is better at technology while Xiaomi is better at ecological chain, so there is naturally a difference in foreign caliber.
But what should be noticed by Huawei is that Xiaomi, which comes in to emphasize on technology, is also pushing the IoT ecosystem to accelerate its wisdom.
On November 5, 2020 MIDC millet developers conference released the “little love classmate” version 5.0, and officially upgraded from the voice assistant to intelligent life assistant. Cui Baoqiu, vice president of Xiaomi Group and chairman of the Technology Committee, said that Xiaoyi Ai classmate 5.0 achieved five major upgrades: full-scene intelligent collaboration, conversational active intelligence, multi-media state integration interaction, customized emotional voice, intelligent life good assistant.
Cui Baoqiu revealed that the number of devices activating Xiaoyi classmates worldwide reached 228 million, and the number of Xiaoyi classmates monthly live devices reached 78.4 million, with a total of 61.7 billion wake-ups.
The most noteworthy is that Xiaomi also launched the Internet of Things (IoT) platform Xiaomi Vela. chairman of the Xiaomi AIoT Strategy Committee, general manager of the IoT Platform Department Fan Dian introduced, Xiaomi Vela can open up fragmented IoT applications, support cost-effective MCU devices, can natively support Xiaomi seconds to enjoy the function. Currently watches, bracelets, speakers, smart appliances, camera ISP, sensors, these hardware is already in the planning.
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At the launch of Huawei’s new Mate 40 series some time ago, Wang Jun, president of Huawei Smart Car Solutions BU, formally pointed out that “Huawei doesn’t make cars, but it wants to help car companies make good cars.”
Thus, the long-standing mystery surrounding Huawei’s layout of the automotive industry was unraveled – Huawei wants to be a super supplier of smart cars and export smart car solutions down the road for car companies.
Huawei officially announced the HI full-stack smart car solution at the press conference: 1 new computing and communication architecture and five intelligent systems (intelligent driving, intelligent cabin, intelligent electric, intelligent network connection and intelligent car cloud), as well as a full set of intelligent components such as LIDAR and AR-HUD.
Wang Jun introduced, HI provides computing power and operating system, including intelligent driving computing platform, intelligent cabin computing platform and intelligent vehicle control computing platform, as well as three major operating system AOS (intelligent driving operating system), HOS (intelligent cabin operating system) and VOS (intelligent vehicle control operating system).
After the sale of glory, Ren Zhengfei to where to break out?
This shows Huawei’s ambition, which is not small.
According to the “2019 China Telematics Industry Market Prospects and Investment Report” released by the China Business Research Institute of Industry, the market scale of China’s Telematics market will be nearly 180 billion in 2019, and with the further application of Telematics technology, the market scale of China’s Telematics market will keep expanding, and will exceed 200 billion yuan by 2020, or 300 billion yuan by 2022.
Today’s camp targeting this track includes both Internet giants, including Ali and Baidu, as well as a host of new energy car companies, with fierce competition.
According to the “Evening Point” report, recently Ali put forward a new target for the zebra network – the car operating system AIiOS to reach 10 million units installed in three years, while in July 2016 to September 2019, AIiOS installed just over 900,000 units. Zebra Network, a joint venture between Ali and SAIC, was strategically restructured with Ali YUNOS (AIiOS) last year, and Ali became the largest shareholder of Zebra Network.
Zebra network recently also made a “trilogy” to reveal planning: intelligent machine – intelligent cabin – intelligent car, the same strides forward.
And then look at other players to cut into the car network of this market, most of them will focus on the field of driverless.
In the first half of the year, ideal car CEO Li Xiang in an interview with the media has exposed its automated driving strategic planning: ideal will be in 2021 to 2022 to achieve the NOA function (according to the map navigation assistance driving), and eventually in 2024 will start through the OTA way to let its models with L4 level automatic driving ability.
On October 10, Baidu’s unmanned Apollo GO was opened for testing in Beijing, and Beijing users can call for a free experience through Baidu Maps and the Apollo GO App with one click.
On October 21, according to 36 Krypton, Uly is planning to develop an autonomous driving computing chip, which is mainly promoted by Li Bin, chairman and CEO of Uly, and Uly has set up an independent hardware team “Smart HW (Hardware)”.
It’s not hard to find, although there are many entrants, but to Huawei such output full-stack intelligent car solutions are few, Ali holding zebra network proposed “intelligent car machine – intelligent cabin – intelligent car” strategic planning, seemingly in common with Huawei, but in the end, Ali’s Telematics layout path or rely on investment to achieve.
Huawei dares to do the full stack of the bottom from the technology, the first product under the HI intelligent car solutions – HUAWEI HiCar vehicle intelligence system is based on Hong Meng. As of September, Huawei’s HiCar platform based on Hong Meng has reached cooperation with more than 20 OEMs and 150 models. According to Huawei’s estimation, more than 5 million vehicles will be pre-installed with the platform in 2021. Huawei’s Rising Series AI chips, developed based on the Da Vinci architecture, are also the underlying support for Huawei’s driverless solutions.
Even so, Huawei’s investment behind this is bound to be substantial. Previously a person close to Huawei told Caixin, in the car this track, Ren Zhengfei at all costs, car BU in six years without profit requirements.
The most profitable consumer business is struggling, but a big push into the smart car field, which is bound to put pressure on Huawei. On another level, however, selling Glory today may give Huawei plenty of room to move.
After all, under Ren Zhengfei’s gray-scale management philosophy, the company is investing heavily in preventive measures to keep a foothold on long-term steady development.
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